International Real Estate Report

  • Investing in U.S. Residential Real Estate
  • Japan Set New Domestic Record for Inbound FDI
  • Be Informed to Impress International Clients
  • New Elective Options for the RSPS Certification
  • Global City Office Index
  • Increase in Foreign Tourism in U.S. Can Mean Business
  • International eBooks from NAR
  • Mexico Top Retirement Destination


FOREIGN INVESTMENT

Investing in U.S. Residential Real Estate
Despite the current credit crunch and market turbulence, investment in U.S. housing is a good bet as long as investors and developers consider the increasingly complex environment, writes Richard Hanson, in a Summer 2008 Real Estate Issues article published by The Counselors of Real Estate. Factors he notes to consider include changing housing demographics that favor dense urban living, rising energy costs and declining supplies, and the cost and availability of food. The article charts U.S. home prices over the past two decades and the increasing need for housing, and speaks to the impact of employment, interest rates, and energy supply along with other factors that can help both developers and foreign investors understand that the perception of weakened U.S. residential real estate markets may be more psychological than technically true. While at the CRE site, REALTORS® should check out the Real Estate Issues archive of articles (select "International" under Topic). The search results produces 75 past abstracts with access to full PDF articles written by Counselors.


Japan Set New Domestic Record for FDI
Japan's imports and exports both recorded their highest levels ever in 2007, with exports topping US$700 billion for the first time and the export-to-GDP ratio reaching 16.3%, also a record, according to fhe Japan External Trade Organization (JETRO), which released a summary of it 2008 White Paper on International Trade and Foreign Direct Investment (FDI). In 2007 Japan also recorded its highest ever level of inward FDI, totaling US$22.2 billion. A recent JETRO survey of foreign-affiliated firms in Japan revealed that the country's business environment is being viewed more favorably. Issues that traditionally ranked at the top of firms' concerns such as high business costs, complicated administrative procedures and closed markets, all ranked lower in the recent survey. Moreover, Japan's increased inward FDI further internationalizes the economy and increases employment and productivity. Also contributing to the country's economic growth is the growing number of free trade agreements (FTAs) coming into effect in the Asia Pacific region with trade among FTA partner countries accounting for half of the area's total trade (in value). The full version of the White Paper will be available for free download beginning in late November. REALTORS® interested in Japan as an investment market can participate in a special Japan Tour, as part of the MIPIM Asia 2008 property exhibition. NAR is the sponsor of the USA Pavilion. Learn more about NAR's participation and opportunities for REALTORS®.


CULTURALLY CORRECT

Be Informed to Impress International Clients
Americans traveling outside the U.S. typically find the rest of the world very informed on current U.S. political leaders. In this presidential election year, this is likely to be even more true as the rest of the world watches the presidential race right along with Americans. Unfortunately, the reverse is not so true; most Americas are far less informed about other countries leaders. REALTORS® working with foreign nationals will serve themselves well to brush up on the current issues of the country, including government leaders. You'll likely impress clients or customers with your knowledge, and equally important, avoid any awkward conversation by steering clear of sensetive political topics. Test your own knowledge of world political leaders.


New Elective Options for the RSPS Certification
U.S. REALTORS® working in resort markets are likely to be dealing with non-U.S. buyers. According to 2008 NAR research, the majority of foreign buyers (55%) who purchased homes in the U.S. did so for use as a vacation home while 13% purchased a home as a rental property for investment purposes. Thirty-one percent said they purchased a home for use as both a vacation home and rental/investment property. Whether specializing in resort properties or just handling the occasional buyer, agents will benefit from earning NAR's Resort and Second Home Property Specialist (RSPS) Certification. The program requires the completion of the two core courses, along with an elective course credit. New options are now available for the elective credit requirement, including completion of any of the Certified International Property Specialists (CIPS) courses. Given the growing number of non-U.S. buyers of resort properties, an elective course that speaks to the unique aspects of serving international buyers would be an valuable option. The two-day introductory "International Real Estate for Local Markets" is an excellent primer and also allows for membership in the CIPS Network where many foreign brokers refer buyers looking for U.S. resort properties. Learn more about the RSPS certification program and its elective course options.


GLOBAL MARKETS

Global City Office Index
Property & Portfolio Research (PPR) has released an updated Global City Office Index, aimed at investors on the lower end of the risk spectrum. The index uses economic and real estate performance, as well as risk metrics to help investors analyze (at a high level), the markets they may want to investigate furthers. REALTORS® can obtain this report to assist the growing number of global investors. In-bound U.S. foreign investors accounted for $51 billion (10% of transactions) in 2007, up from $12.7 billion (7%) of total investment sales in the U.S. in 2004. Similarly, European cross-border activity continues to increase where of the €244 billion direct real estate investment in 2007, 63% (€154 billion) was cross-border, up from 29% in 2000. PPR's Index examines three main drivers: National and metro area economic drivers, real estate performance, and real estate risk. The index ranks 18 global cities, whose rankings changed based on the which key driver was examined. When all factors were combined, New York ranked the highest, followed by Los Angeles, London and Paris. Singapore, which ranked 5th overall, was the top Asian market in the Index. The full report provides more in-depth analysis, and high level conclusions and implications.


Increase in Foreign Tourism in U.S. Can Mean Business
The weaker U.S. dollar has been a boon to the American tourism sector. According to the U.S. Commerce Dept., 4.7 million international visitors traveled to the U.S. in March 2008, up 19% from March 2007. Visitation from overseas markets has grown for 11 consecutive months, with visitors spending a record $11.4 billion during the month, up 20% from the same month the previous year, according to commerce data. NAR's new 2008 Profile of International Homebuying Activity reports that the majority of foreign buyers (55%), purchased a U.S. home to use as a vacation venue for family and friends (up 8% from the 2007 study). REALTORS® working in markets attracting foreign tourists should look to these visitors as potential buyers. Consider advertising in places to target these visitors, e.g., hotel visitor guides. Partner with area tourist services to offer an free service or upgrade in exchange for an afternoon property tour, designed specifically to appeal to foreign buyers. Learn more about what these buyers are seeking in the NAR study, incuding barriers to purchasing property. Current U.S. immigration laws prohibit stays beyond six months for foreign visitors. To best serve these clients, know the U.S. visa policies.  


BUSINESS RESOURCES

International eBooks from NAR
NAR's Information Central offers electronic books, including an international selection, which which NAR members can access and download for free. It works much like a regular library -- titles can be "borrowed" for two or three weeks, depending on the format. Review NAR's international collection of eBooks.


Mexico Top Retirement Destination
Between now and 2025, there will be a baby boomer retiring every 16 seconds. While 2030 will be the peak year of boomer retirement, the first year of boomers (born 1946) turn 62 this year; many of which are now retiring and taking advantage of a record levels of leisure income. Each year International Living examines the best opportunities worldwide for retirement living and publishes their Global Retirement Index. International Living looks at such issues as where the dollars go furthest, which country is the safest, and quality of health care. Top priority is given to issues that matter most to anyone planning for retirement, including programs of special benefits for retirees, e.g., tax breaks, discounts, and freebies, that various governments proffer to residents, sometimes specifically to foreign residents in an effort to attract investment and retirement dollars. In the current Retirement Index, Mexico tops the list with real estate opportunities being a significant factor in the overall ranking. Other top countries include Ecuador, Italy, and Panama.

Report compiled by NAR International Operations, narglobe@realtors.org.

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2008 NAR Report.pdf359.33 KB
NAR study.pdf363.91 KB

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